Gold to see a lengthy pause before resuming the core bull trend – Credit Suisse


Gold extends its consolidation after moving to $2075/80. Strategists at Credit Suisse remain of the view this is a pause in the core bull trend but that this phase could last a significant while and the yellow metal could yet see a test of support at $1867/37.

Key quotes

“Gold continues its expected consolidation following the move to our base case objective of $2075/80. Although we continue to see the core long-term trend higher, reinforced by falling US Real Yields and a falling USD, we suspect there is scope for a more protracted consolidation phase to unfold first.”

“At present, our bias remains for a cluster of supports at $1867/37 to ideally hold further weakness, which includes the 23.6% retracement of the rally from the 2018 low. Should weakness extend, we would see scope for a deeper setback to $1765, potentially $1726.” 

“Post this phase we look for an eventual move above $2075 with resistance seen next at $2175, then $2300. Whilst we would look for a fresh consolidation at this latter level, a direct break can see potential trend resistance at $2417, with scope seen for $2700/20 over the longer-term.”

“It is worth noting that monthly RSI has reached its extreme levels seen in 2006 and 2008 adding weight to the view for a lengthier pause in the bull trend. Indeed, in the 2001/2011 bull market the two major consolidation phases (2006/2007 and 2008/2009) lasted 16 and 18-months respectively. A similar length of consolidation at this juncture though is not our base case for now.”

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD trims early gains, trades around 1.1860

EUR/USD retreated from daily highs reached after the release of upwardly revised EU final PMIs. The US dollar founds some demand on a denting market's mood. US ISM Manufacturing PMI unexpectedly dropped to 59.5.

EUR/USD News

GBP/USD under pressure but around 1.3900

UK Marking Manufacturing PMI improved to 60.4 in July. Tensions related to the Northern Ireland Protocol undermine the pound’s demand. GBP/USD is at risk of falling in the near-term, mainly once below 1.3865.

GBP/USD News

Gold: Risk-on and record low real yields underpins the yellow metal start of week

Just ahead of the closing bell on Wall Street, XAU/USD is trading at $1,816.00 and higher by 0.1% after travelling from a low of $1,805.87 to a high of $1,819.56. 

Gold News

BTC and XRP correct in time versus price as ETH remains unstoppable

Bitcoin ends three-month decline with a compelling 18.35% gain in July while ETH is working on a historic 13 consecutive up days. XRP closed last week with the best weekly return since the end of April.

Read more

Looking ahead to payrolls as markets bounce on China / US truce

Equity markets have started the week on an upbeat note, after a bumper round of earnings reports in recent sessions have helped to boost sentiment. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures